The Section 179 Deduction
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In this 2nd course of the Federal Tax Return Analysis Skill Series, participants will examine the Section 179 deduction, its conditions, limitations, impact on taxable business income, accrual financial statements, personal tax obligations of business owners, borrower performance ratios, and cash flow statements, including the UCA cash flow statement.
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Certificate
1 credit or $295
Cost
1.5 - 2 Hrs.
duration
1 hr.
Prep Time
1
Quiz
Overview
In the second webinar session, participants examine the purpose of the Section 179 deduction. They examine its conditions and limitations for use and its role in establishing taxable business income for each of the standard business organizations. They identify the impact, if any, of the Section 179 deduction on a borrower's accrual financial statements. They trace the impact of the Section 179 deduction on the personal income tax obligations of partners and owners of partnerships, limited liability companies, Subchapter S corporations, and sole proprietorships. In addition, participants examine the impact of the Section 179 deduction on borrower performance ratios and cash flow statements - including the Uniform Credit Analysis (UCA) cash flow statement - computed from information in the business income tax returns as well as from information in the accrual financial statements.
Who Should Take This Course
This Course is ideal for participants currently in or aspiring to enter the following job functions:
- Credit Management
- Commercial Credit Administration
- Commercial Loan Administration
- Commercial Loan Portfolio Management
- C & I Lending
- Corporate Lending
- Loan Review
- Special Assets
- Internal Audit
- Non-Profit and Municipality Lending
- Health Care Provider Lending
- Specialized Lending
- Credit Analysis
Prerequisites
Familiarity with accrual financial statements and the use of ratios and cash flow statements in assessing borrower risk.
Objectives
By the end of the webinar session, participants will be able to:
- Identify the fundamental objective of the Section 179 deduction and the conditions and limitations for its application and use.
- Identify the role the Section 179 deduction plays, if any, in establishing taxable business income for each of the standard business organizations, i.e., for Subchapter C and S corporations, for partnerships and limited liability companies, and for sole proprietorships.
- Identify the relationship between the Section 179 deduction and the accumulated depreciation balances on Schedule L for Subchapter C and S corporations, for partnerships, and for limited liability companies.
- Identify the impact of the Section 179 deduction on the personal income tax returns for owners of each standard business organization.
- Identify the impact of the Section 179 deduction, if any, on the computation and use of key performance ratios computed from a) information in a borrower's business income tax returns and b) information in a borrower's accrual financial statements.
- Identify the impact of the Section 179 deduction, if any, on the computation and use of two popular cash flow proxies and the Uniform Credit Analysis (UCA) cash flow statement computed from a) information in a borrower's business income tax returns and b) information in a borrower's accrual financial statements.
Materials(access provided with registration)
- Credit Refresher on The Section 179 Deduction
- Excerpts from Sandover Contractors, Inc.'s Form 1120S
- Accrual Financial Statements for Sandover Contractors, Inc.
- Form 1040 for Douglas McPherson
- Exercise for the Session 2 Webinar
- Webinar Presentation Slides
- Webinar Poll Questions
- Webinar Poll Solutions
- Exercise Solutions
This is Course 2 of 8 in the Federal Tax Return Analysis Skill Series
Business Income Tax Returns
The Section 179 Deduction
Understanding Schedules K-1
Personal Income Tax Returns and Cash Flow
Schedule M-1 and the Accrual Income Statement
Business Income Tax Returns and Ratio Analysis
Business Income Tax Returns and Cash Flow Analysis
Cash Based Income Tax Returns
